THE Iloilo Business Club (IBC) said the P13.50 to P41.50 increase in minimum daily wages in Western Visayas, which takes effect today, July 12, 2018, might result in the downsizing of companies and mass layoffs.
In its manifestation sent to the Regional Tripartite Wages and Productivity Board (RTWPB-6) on July 9, 2018, the IBC averred its “strong opposition” to the implementation of the wage hike.
It said the wage adjustment might lead to the following situations:
*compromise the chances of the business sector of Iloilo to compete with more mature region
*will cause the instability of prices in Iloilo City
*the employees will have less chances of absorbing spikes in the operating cause of business warranting the downsizing in the number of employees to prevent losses.
The IBC is comprised of business leaders in Iloilo City and Province representing about 350 business establishments from various sectors and industries.
On June 8, 2018, RTWPB-6 approved the P13.50 to P41.50 increase with a cost of living allowance (COLA) component on the daily minimum pay of workers in the private sector.
Workers in non-agricultural, industrial, and commercial firms employing more than 10 employees will receive P365 daily, up from P323.50. It is derived from the P26.50 wage hike plus P15 COLA.
Workers in non-agricultural, industrial, and commercial companies employing less than 10 workers will have a basic salary of P295 from P271.50, after an increase of P18.50 plus P5 COLA.
For the agricultural sector, the minimum salary for plantation workers was increased from P281.50 to P295, (P8.50 hike plus P5 COLA).
For non-plantation workers, the new rate is P295 from the previous P271.50 after an increase of P18.50 and P5 COLA.
In its position paper previously submitted to the board, IBC also appealed for a moratorium on minimum wage increases in Western Visayas.
The last wage increase amounting to P15 to P25 imposed in March 2018 has placed the region within the highly industrialized regions of Davao, CALABARZON, and Central Visayas, the club said.
“In terms of affordability and cost of doing business, we can no longer compete with regions who are also bullish over attracting investments in manufacturing,” it added.
With Iloilo Province now gearing towards ecoonmic zone investment, IBC said Western Visayas will compromise its chance to compete with mature regions that have more to offer ecozone locators if its minimum wage keeps on increasing.
“Western Visayas is also the region with the highest number of wage increases over the years and most are granted by virtue of petitions. If this annual increase persists, we are projecting an image of instability of prices in the region,” it said.
The club also hopes that the wage board will consider the temporary closure of Boracay Island in Malay, Aklan as a supervening event in the region to maintain the status quo.
They cited that suppliers in Iloilo and tourism related products and services have to contend with the loss of volume transactions in the next six months.
Businesses are also affected by the increase in fuel taxes brought about the tax reform law.
They also appealed to the wage board to conduct an “industry consultation study throughout the year” for them to have a clear picture of how much the businesses can afford.
A P7.50 to P10 increase in minimum wage is the range of increase the business sector can afford at this time, it stressed.
“We need a regional economy that has a diversified income stream, skilled and productive workers and a business climate that retains investment,” the IBC said.